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How-to-steps when prepping and labeling in China

Today I wanted to walk you through the process of placing the order with your factory and which steps you need to take to guarantee safe delivery.

The following is crucial when you start out and are looking to save costs because of a tight budget or wanting to learn the ropes when it comes to working with factories in China.
I actually recommend that you handle your first order with factories in China yourself so that you are aware of all the steps that need to be taken.

As time passes and you enlarge your assortment you should be focusing on developing your business, adding new products, travelling to exhibitions and you will have less and less time to manage your factory orders.
At this point I recommend you to let professionals in China take care of your orders who have been doing this for years, actually sitting in China, easing the communication with suppliers because of the same time zone and local language but many more reasons.

WIthout further ado here are the steps to be taken that I go trough once we I am ready to place an order to a factory:

Step by step guide when shipping directly to Amazon:

Once you have agreed on all terms with the factory (price, MOQ, etc.) you should request the Proforma Invoice and below details.

STEP 1: Creation of Product Listing

  1. Supplier must send you all details concerning the product and its packaging in order for you to create a listing on Amazon (if you haven’t done that yet) This includes:
    – Product pictures (if they don’t have good ones you should ask for a final sample to be sent to your photographer of choice)
    – Product measurements and weights
    – Packaging unit measurements and weights
    – Export carton measurements and weights
    – Factory address and contact details (needed to create the shipment plan on Amazon)
    – Die-cut of the packaging (in order for you to create an artwork –if needed)
  2. With these details you then need to go onto Amazon Seller Central and click “add a product”. Ideally your items are unique therefore we recommend you to create a new listing.
  3. Latest at this stage you will need to purchase either an UPC (for the US) or EAN barcode (for Europe).
  4. Create the general product listing with the details that you have from the supplier. Please note that you do not need to enter all bullet points or descriptions at this point. You can do so while the product and order is being placed.
  5. Once you have finished the product listing Seller Central will automatically take you to “send & replenish” meaning that you are now in the process of creating the shipment labels and plans for this product. If it does not take you there automatically please go to: “Manage FBA Inventory” in the tabs on Seller Central. Tick the product listing and select “send/replenish”. If the product is not there yet give it about an hour before the listing shows up.
  6. Now you will have to create the shipment labels for the factory to apply to your cartons.
  7. To do so you will have to follow the instructions of Seller Central and populate the fields accordingly.
  8. Enter the units per case (export carton) and number of cases (export cartons). You can gather this information from the packaging & units per packaging that the supplier sent you under step 1).
    For example:
    If you order 1000 pieces of a garlic press. The supplier will give you the unit per packaging and number of export carton. For example the supplier packs 50 pieces in an export carton meaning there will be a total of 20 export cartons (1000 units in total). Enter this information in the fields.
  9. Under “prepare and label products” choose “Merchant” in both cases. Meaning the supplier will apply the labels for you at the factory.
  10. The next step will be to “complete shipment”.
  11. Once you press complete select: “work on shipment”.
  12. You will now be asked as to how things will be shipped.
  13. Select SPD (Small parcel delivery) if cartons are below 20 pieces and or weight of total shipment is LESS than 150LBS (75KG).
  14. Choose Shipper as “other”.
  15. Select LTL (Less than truckload) if shipment is more than 20 cartons and or total shipment weight is MORE than 150LBS (75KG)
  16. Select “multiple boxes” under shipment option or “more than one SKU per case”.
  17. Select “webform”.
  18. Enter the units per case (per export cartons) and number of cases (export cartons) as well as the weight. Again this is the information that you receive from the supplier under Step 1.
  19. Check all information is correct and confirm shipment.
  20. You will now be able to print shipment labels.
  21. Click on “print labels” and save the PDF on your computer.
  22. Send this PDF together with further documents under Step 2 to the supplier. (send once you have completed all steps to avoid dripping information to the supplier as this irritates them).

STEP 2: Logo’s/barcodes/insert card

  1. If you have your own logo or artwork for the unit packaging send the logo in .AI or .EPS file to the supplier.
  2. Advise the supplier where you would like to have your logo placed onto the packaging. E.g. if you want your logo on top of the packaging and the barcode underneath tell them so.
  3. If you have no logo advise the factory only to print the barcode on the unit packaging. However I recommend you to have at least a written company name on the unit packaging.
  4. If you have UPC or EAN barcodes that you purchased under point 3) above send these barcodes in .AI or .EPS file to the supplier.
  5. If you have your own artwork design of the entire packaging send the entire artwork including barcodes, logos, photos and description. The supplier should be able to send you the die-cut that you need to create an
    artwork under point 1) above.
  6. If you have no artwork designed and only wish to ship the product in a white box with logo and barcode on it advise the supplier of this.
  7. If you wish to include an insert card that for example has your company name and instructions on how to use the product send the insert card to them.

STEP 3: Order placement and order instructions

  1. Before you place the order and get started with production I advise to send all files as described above in one go. Again, this should include:
    – UPC or EAN barcode
    – Export carton shipping labels
    – FNSKU barcode that you can print in the shipment plan under “prepare and label products”. This is only needed if for example you are re-ordering or listing your product under an existing item on Amazon.
    – Artwork design (if any)
    – Your own logo (if any)
    – Insert card (if any)
  2. If any of the above is applicable but missing from your side I recommend to collect/prepare all information first. However in most cases you can send artworks and insert card to the factory at a later stage but should not later than 25 days before production.
  3. An example email of how to instruct a supplier with labels can be found here: http://importdojo.com/how-to-properly-place-an-order-with-factories-in-china/ 

STEP 4: Order placement

  1. If you have not placed the order yet now is the time to place the order together with all your documents as described above and instruct the supplier accordingly.
  2. FNSKU/UPC’s etc. need to go onto the gift box/unit box. Usually at the bottom of the box or a small side
  3. Shipping labels need to be put onto the outer side of the export carton. Seller Central will give you a PDF with a number of all labels (according to your order quantity)
  4. Pallet labels apply when you ship by pallets. This is usually recommended above 20-30 cartons.
  5. The supplier should now arrange the order and production with your above instructions.
  6. Follow up your order and book inspection, shipment and final samples if necessary

Most importantly: Have an inspection!

I know,I know I keep saying it but yet I still hear so many horror stories in Facebook groups that people didn’t have an inspection. When you book an inspection (and those services start at 100$) you can instruct the inspector to check all of the above to make sure the supplier followed them through.

If your supplier forgot labels, barcodes or insert cards for example this can be found during an inspection. You want a hassle free delivery to Amazon’s warehouse and an inspection is therefore a must.

Monitoring your order is very important to keep the supplier engaged with your order and not to miss important deadlines.

Here is an overview of how we at ImportDojo handle order follow up after Step 4:

STEP 5: Follow up
1) We will now keep you updated with the order completion date as well as any inspection date
2) We will keep you informed on the shipment booking and arrangement
3) We will advise you when inspection will be done and when the result is out
4) We will advise you when inspection is pass, shipment picked up and on its way to Amazon. If inspection is not pass we will inform you immediately and work together with you to find solutions. In 90% of all cases if the inspection is not pass it is only because of minor defects like scratches.
5) If inspection is pass we will inform the shipper to pick up the goods.
6) The final payment of the order is now to be made to the supplier (usually the remaining 70%) before shipment is released from the supplier.
7) A shipping company that we recommend will now pick up the goods and arrange the transport as well as appointment booking with the Amazon warehouse. If you wish to have the goods delivered to your own warehouse or other address please tell us once we place the order to the supplier.
8) We will inform you once goods have landed in the US and are to be delivered to Amazon.
9) You should get a notification from Seller Central as soon as goods are being checked-in.

All done!

Please note that you should advise your supplier before hand that he has to print labels and stickers to be put on your packagings export cartons BEFORE receiving the Proforma Invoice.
If you tell the supplier at a later stage that there will be labels and stickers to be applied they might charge you more.

 

More information and email templates on how to properly place orders in China also here:
http://importdojo.com/how-to-properly-place-an-order-with-factories-in-china/

Hope this helps you guys in determining what you need in terms of labels, insert cards etc.
Please feel free to share this post :)

All the best and happy sourcing,
Manuel

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4 ways to avoid being scammed by a supplier

The most asked questions I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit?

To be honest with you the easiest way to make 100% sure is to go visit the factory but I realise that most of you won’t be able to do so.

The goods news is there are ways to figure out if a supplier is legit or not without going to China. The bad news is that some of these options will cost you some money.

Here are my four proven ways of researching a supplier. I will go into detail for each one of them.

1) Factory audits

2) Alibaba research

3) Certificates & reports

4) Skype call

 

1) Factory audits

A factory audit is where you hire a Third-Party Inspection Company to conduct an audit at the factory’s facilities.

This way you can make 100% sure your supplier is legit.

Be aware that not all factories allow you to perform an audit at the location which is in turn already a huge red flag.

If they are willing to undergo an audit straight away it is a good sign already. You don’t necessarily need to perform an audit but announcing to a supplier before you order that you will conduct an audit already gives you some idea on what your supplier is up to.

Lets take a look at the procedure when booking a factory audit. There are many Third-Party Inspection companies out there and I mention them in a few posts (TUV, SGS, Bureau Veritas etc.) but I always use Asiainspection because they are efficient, cost effective and reliable. There are companies out there who charge half the price but you don’t have a convenient interface/dashboard online that lets you do the booking trough their system. Most of the cheaper Inspection Companies have only email/phone conversation bookings available.

Lets take a look at how you can book an audit with a factory online trough Asiainspection.

Login into your account and click on “BOOK NOW” and then click on “Factory Audit”. This is how it looks like:

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Next thing is you need to start inputing general information such as your reference, the requested audit date etc.

You also need to let them know if this is a first audit or re-audit. Then they will take extra care for issues that you can input later.

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In the next mask you input the factory’s detail, contacts and addresses where you want the Inspector to go. The system also stores this information and makes it easier for you next time you want to audit or book some inspection at this factory.

Read more

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Alibaba Hacks: The most efficient way to find suppliers on the biggest sourcing website

Get some insights how to sort, filter and find suppliers in the most efficient way.

Watch the video for all details or read the article below to understand the process.

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Today you want to source for an action camera, similar to the GoPro cameras.

You can start by going to the main page of Alibaba.com and input “action camera” in the search option.

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Ok, so you found 106,946 products. At this point you want to filter your results for the most relevant suppliers. You will definitely want the suppliers to be:

Gold suppliers:

This is a paid membership from Alibaba for the supplier. They get featured and can put up a lot more items in their catalogue (among other functions).

Onsite Checked:

The onsite operation of the factory has been checked by Alibaba and a third party confirmed its legal existence.

Assessed suppliers:

This is a third-party assessment usually done through a testing company to verify various parts of the company. This includes machinery, staff, engineers, workers, certification, and much more.

After you have filtered for this you are down to 8,258 products:

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Insider tip:

Now you filter down to the relevant manufacturing province. Why? Because each province in China is specific for different product categories.

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Sourcing at the HK Electronics Exhibition

I went to the Hong Kong Electronics Fair in Wan Chai early morning today.

Here is a general link of the fair:

http://www.hktdc.com/fair/hkelectronicsfairse-en/HKTDC-Hong-Kong-Electronics-Fair-Spring-Edition.html

It is hosted by HKTDC (Hong Kong Trade Development Council) and it’s located at the Wan Chai exhibition centre which is the biggest exhibition centre in Hong Kong.

I mentioned about the fairs from HKTDC in the Import Bible. They are the biggest in Hong Kong and they host most of the fairs here. They cover all kinds of products from Jewellery to Electronics to Textile, Gifts & Premiums and much more.

The easiest, fastest & cheapest way to get to the exhibition grounds is by MTR (Subway). You can take a taxi as well which is pretty cheap compared to western countries but it might be difficult to get a taxi in the mornings.

Head over to Wan Chai MTR and exit at A5 (HK Convention & Exhibition centre).

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Just follow the crowd on the skywalk towards the exhibtion centre. There’s a lot of promoters running around handing out leaflets & maps already. Grab one.

 

 

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Read more

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Live from the Global Sources EXPO Part-1

Hey guys,

A little update here after Day-2 of the Global Sources EXPO in Hong Kong.

As you all know I am exhibiting my own brand/private label at the Electronics exhibition.

I was really busy the first 2 days with buyers from all over the world, so I didn’t have much time for sourcing myself.

I plan on doing that on the last day and I will go sourcing to the other Electronics fair on 15th of April all day.

Here are a few pics from the last 2 days.

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Buyers love private labels from Asia. 
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Obviously upset with some supplier.

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Discussing MOQ’s & prices with a US buyer.

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Enjoying some yummy Dim-Sum during lunch time.

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I promise to give an update on trending products here at the exhibition soon, so stay tuned!

Best,

Manuel

 

returns

Claims and compensation

Ok, so your received goods are damaged, the wrong plug is attached, or the goods are returned from your customer for not functioning or other reasons. This is a bit tricky.

I use this following tactic only when it’s absolutely the manufacturer’s fault. If I also made a mistake perhaps on the order sheet or not having stated something clearly I will go mild on him and try to settle for compensation rather than a claim.

Collect all information on returned or damaged items. Document with photos, emails, and reports from your customers.

Start by calculating your loss incurred due to broken/damaged items and incurred loss due to loss of sales. Take this desired figure and add 20%.

Why 20%? Because the supplier will probably only offer you 50% of your total claim in his first response. Hopefully you can settle on the 100% (without your fictitious 20%)

Send a combined and detailed report to the supplier and state your claim with the desired amount.

If it is a new supplier he will probably try to wriggle himself out.
But if you have actual proof there is nothing he can do – but he will try to pay as little of the claim as possible.

In many cases the supplier will offer a discount on your next order. This may be acceptable if you plan on reordering and the supplier is usually reliable with your other orders/shipments.

If you do not plan on reordering from this factory you may as well demand compensation right away. I would not go as far as to threaten the supplier, but daily calls and emails will definitely help if he is stubborn on compensation.

You may also contact me and I can help communicate with the supplier (manuel@mandarin-gear.com)

Eventually, you will hopefully settle for the actual desired amount.

Another option is, if you have actually done an inspection by a third party and the report of this inspection shows no problems on the production or that particular problem you can actually claim money from the third-party. But you will need substantial proof, same as with the supplier. This can be done in addition to the claim to the factory to get the maximum compensation for your occurred loss.

There are also a few legal options if you are within your rights. You might want to get in touch with an expat lawyer within China or a lawyer based in your home country.

Some suppliers have product liability insurance (http://en.wikipedia.org/wiki/Product_liability), which covers the loss due to a a problem with their products.

If you are importing large quantities regularly I also recommend you look into this with your trusted insurance company. There are a few within China/Hong Kong that provide this service if you don’t find anything within your home country. For example, HSBC ,which is the largest bank within Asia that most suppliers use.

 

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Receiving your order

Once you have paid all necessary customs taxes and duties your order should be received within your warehouse/facility.

Upon receipt, check the contents of all goods. If you ordered a large amount of pieces this should be done professionally by a fulfillment center/company.

Check the content of goods and open a few boxes to make sure you received the right items.

If anything is not as you ordered look at http://importdojo.com/claims-and-compensation/

Your products are ready to sell!

 

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Checklist

Monitoring your order

This is VITAL. You cannot just place the order and sit back and relax.

Make sure you keep in communication with the supplier. It doesn’t need to be on a daily basis but it wouldn’t hurt to check on the status once a week, especially if you are in the process of arranging the inspection or shipment date with your inspection company/logistics provider.

Unfortunately, the suppliers get a lot of orders so some smaller orders may be given less priority. Keep reminding him of the deadlines that you have set out.

It is common that a few parts of the order, such as the shipping mark on the export carton, packaging, etc., are discussed AFTER order placement.

That doesn’t mean you don’t need to prepare for everything on your side before order placement. But it will save you time having the instructions for the supplier ready before order placement.

It wouldn’t make much sense to flood the supplier at order placement with all information, but the essentials need to be covered. Essentials are mentioned in the previous chapter.

Make yourself a CHECKLIST (we provide a simple check-list underhttp://importdojo.com/docs/supporting_docs.zip
Mark things complete or chase the supplier when things are dangling in the air. See above in Chapter 22 for an example of a check list.

 

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Negotiation

It is a given that once you place your order you negotiate the price.
No matter if you are below the supplier’s MOQ or not. You are now ready to place the order and you let the supplier know your terms.

Use the price that you were originally quoted and decrease it by 20%. Give this target price to the factory and let him know you would like to order with your (20% reduced) price. In many cases the supplier may not agree to your new target price but he may reduce it another 5%.

In 80% of the cases he will give you a further reduction on his original quoted price, unless your quantity is really very low.

Also mention to him that this will be the first trial order and that if it is successful larger orders will follow.

Once your price is negotiated you are ready to send your PO.
This could be an informal text in an email with all details or a Word/PDF file that you have created. We will supply a blank pro forma Order in this course.

I will update more soon on a few “advanced negotiation skills” on here.

 

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I need to order all that?

Minimum order quantities (MOQ)

Most suppliers give you an incredibly high amount for an MOQ (Minimum Order Quantity). Most of the time this is fairly negotiable. Say for example a supplier gives you a MOQ of 1,000 pieces, and that is his desired quantity to start production.

There are ways around this. If, for example, you are not in need of a color gift box but would rather have a white box the quantities tumble. Most suppliers will agree to produce 200 pieces for a white box.

So why the 1,000 pieces? For one, 1,000pcs is usually the minimum order quantity for colored or private label gift boxes. That’s a fact and some printing factories actually require more than 1,000pcs.

If you want, say, 300pcs of an item and a color box you may ask the factory if they can still print the color box if you are willing to pay a higher price for the printing of the gift box.

If you don’t need a gift box but you want some label or logo on the box you can ask them to put stickers on it. Stickers usually cost a few cents and can be printed easily.

Simply ask your supplier once you have settled on an item what his MOQ is and I am certain it can be discussed, depending on your requirements.

 

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